Marketing budget

[Joseph Grullon]

I have a budget that I have saved up in order to start my real estate investment future. I would like to fix and flip properties and eventually acquire buy and hold properties. My question is what would be a good marketing budget to start out with in order to gain leads?

[Dev Horn]

Think of marketing for motivated sellers as 2 different military strategies:

1) LASER GUIDED MISSILES - go after specific owners (e.g. absentee) with specific characteristics (e.g. % equity, area, home value, etc.). You can use direct mail to go after these specific people. Mail to them on a regular basis.

2) CARPET BOMBING - layer on top a broad marketing strategy such as door hangers or EDDM (Every Door Direct Mail). With these strategies you cover specific areas and put your message on every door (or mailbox). I like door hangers because the homeowner sees them separate from all their mail...

UNDERSTAND YOUR MARKETING METRICS
Figure it costs about 50 cents (every time) to touch people with strategy 1 and about 15 cents to touch people with strategy 2. And it might take you 20 calls/leads to get a wholesale deal. So, it might cost $2,000 to touch 4,000 homeowners to get 20 calls (.5% response). Your cost per call would be $100 and your cost per deal would be $2,000. You'll figure out the actual numbers for your market - really gives you some clarity when you know the metrics, how efficient marketing is in your market. Once you know that, it's a repeatable process with some degree of predictability (i.e., an actual BUSINESS!).

BTW, online ads (AdWords) are kind of a hybrid in the the offer is out there for anyone to respond but you hopefully target them with specific keywords. Outdoor (billboards, bandit signs) are a form of "carpet bombing" (non-specific marketing). They can work well if you can afford them (billboards) or if they are legal (bandit signs - in most cases these days they are NOT).